The success of the single-vendor approach hinges on matching supplier capacity
with client needs. Only three HRO deals valued at $1 billion or more have been
signed in recent years, and Convergys holds two of them: the $1.1 billion,
13-year DuPont contract signed in November 2005; and the $1 billion, 10-year
Johnson & Johnson deal announced in May 2007. The third mega-deal is Accenture’s
2006 contract with Unilever.
Convergys has signed other major deals in the past year, including a contract
for HR administration and payroll services for Starbucks in the U.S. and Canada
as well as benefits administration in Canada. Customer management remains the
mainstay of the company, however, which reported total revenue of $2.8 billion
in 2007. Convergys’ guidance to investors and Wall Street calls for HR
management revenue of $250 million in 2008, up slightly from 2007, and an
operating loss of less than $15 million for the HR line. (Read
more here.)
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